The Silent Scandal: 401(k)s and the Failure of Responsibility

Markman, Robert
December 1998
Journal of Financial Planning;Dec1998, Vol. 11 Issue 6, p77
Academic Journal
This article focuses on the issue concerning the steady shifting of corporate retirement investing away from defined benefit plans and toward defined contribution models. By 1998, 401 (k) plans have grown to represent the average largest single pool of investment dollars in the U.S. dollars. By the year 2000. it is estimated that employees will be managing $1 trillion of their own retirement money. The size of this investment pool of constantly growing dollars and the uses to which it is put have enormous implications for the financial markets and the larger economy. Accordingly, an enormous amount of energy and resources are being expended to make 401 (k) work for participants. Nowhere is this more evident than in the explosion of choices within 401(k) plans. Today, people regularly read of plans that have expanded their menu of choices to literally hundreds of mutual funds. Indeed, so intense is the "rush to choice" that now many plans allow participants to open brokerage accounts where they can speculate on stocks and funds daily.


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